The December $40 strike puts are the busiest as 7,627 contracts tradedagainst 3,206 in open interest, indicating new positions were initiated. Ruffy noted the Dec $45 and Jan $37.50 were popular as well. The put action wasaccompanied by a rise in the 30-day at-the-money implied volatility as investorsbrace for future stock movement. It rose 13.5 percent to 66.5 percent, he said.

The company reported in late October and raised its forecast for the year. The stock had plummeted in early May after influentialshort-seller David Einhorn questioned why the nutritional supplements marketerhad stopped disclosing details about its distributors. Einhorn, who headsGreenlight Capital, has a reputation for questioning the business practices ofcompanies that he also bets against by selling their shares short.. From April 30 to May 15 the stock dropped nearly 40 percent,Ruffy said.

1544 ET 27Nov2012 OmniVision calls feed interest before earnings----------------------------------------------------------------------------Shares of OmniVision Technologies Inc rose 2.32 percent to $15.42 andcall options on the image sensor maker's stock were busy heading into earnings.The company is due to report fiscal second-quarter results after the marketclose on Thursday. Overall option volume was 4.5 times the daily average with12,000 calls and 2,224 puts traded on the stock near the close, according toTrade Alert. In August, OmniVision reported first-quarter revenue that beatanalysts' expectations, and the company forecast current-quarter sales wellabove estimates.

Most of the options flow on Tuesday was in January and March calls, saidWhatsTrading.com options strategist Frederic Ruffy. The January $19 strike callswere the most popular, carrying volume of 2,445 contracts with 71 percent of theactivity on ask price, suggesting buyer-fueled activity.

Short interest might be driving some of the flow as OmniVision is relativelyheavily shorted, with a short as percent-of-float ratio of 15.3 percent, Ruffysaid. Traders sometimes use calls as a hedge if they want to cover their shortpositions in the stock.

On the options front, relatively small increases in call open interestindicates one or more strategists who established bullish positions on Ralcorpon Monday are enjoying massive paper profits on those positions on Tuesday, saidInteractive Brokers Group options analyst Caitlin Duffy.

Prior to the deal, a total of 197 calls traded in Ralcorp on Monday,slightly above their daily average of 132 contracts, versus 15 puts, accordingto Trade Alert. A review of time and sales data for the Nov $70 and $80 strikecalls reveals 50 calls were bought at each strike on Monday at a premium of$1.80 and 55 cents apiece, respectively. Double-digit percentage gains in thestock price on news of the deal now finds the value of these deep in-the-moneycalls up big, with prices of $18.70 and $8.70 each, respectively duringTuesday's session, Duffy said. Overall volume on Ralcorp on Tuesday afternoonconsisted of 3,328 calls and 5,083 puts changing hands, or 44.7 times the dailyaverage, Trade Alert data showed.

Shares of ConAgra, whose brands include Chef Boyardee pastas and Slim Jimmeat snacks, were up 4.3 percent to $29.50.

1207 ET 27Nov2012 Anadarko call spreader looks for upside in early 2013--------------------------------------------------------------------------------Shares of U.S. oil and gas company Anadarko Petroleum Corp slipped 0.66percent to $73.77 and one option trader appears to be positioning for shares tobreak out to the upside heading into early 2013.